Matson reports higher than expected 4Q14 ocean transportation operating income; preliminary full year 2015 outlook expected to be flat to modestly higher than 2014 levels
Matson, Inc. said it holds a higher operating income outlook for the fourth quarter 2014, citing higher than expected freight rates and volumes as well as declining bunker fuel prices leading to gains. The company also made preliminary comments regarding its outlook for 2015, stating it anticipates flat to higher income for the coming year.
Matson said it expects fourth quarter 2014 ocean transportation operating income to be approximately $45 million primarily driven by higher than expected freight rates in its China service and continued rate and volume growth in Hawaii and Guam. In addition, the timing of fuel surcharge collections in the company's Hawaii and Guam services positively impacted operating income performance in the quarter as bunker fuel prices declined sharply, leading to better than expected fuel surcharge collections relative to the company's fuel expenditures. As a result, Matson lowered its fuel surcharge in two separate announcements during the fourth quarter. For the full year 2015, ocean transportation operating income is expected to be flat to modestly higher than 2014 levels.
In the fourth quarter 2014, Matson expects its logistics operating income to be approximately $3 million primarily driven by continuing improvements in volume, yield and warehouse operations. For the full year 2015, the company expects Logistics operating income to exceed 2014 levels.
The full year 2015 outlook excludes any future effects from the September 2013 molasses incident and the pending transaction with Horizon Lines, Inc., pursuant to which the company will acquire the stock of Horizon, which will include Horizon's Alaska operations and the assumption of all of Horizon's non-Hawaii business liabilities.